Management is pleased to present this financial discussion and analysis of the University of Colorado (the University). It is intended to make the University's financial statements easier to understand and communicate our financial situation in an open, accountable, and transparent manner. It provides an analysis of the University's position and results of operations for the years ended June 30, 2013 and 2012 (Fiscal Year 2013 and 2012, respectively), with comparative information for the year ended June 30, 2011. University management is responsible for the completeness and fairness of this discussion and analysis and the financial statements.
Statements of Net Position present the assets, deferred outflows, liabilities, and net position of the University at a point in time (June 30, 2013 and 2012). Their purpose is to present a financial snapshot of the University. They aid readers in determining the assets available to continue the University's operations; how much the University owes to employees, vendors, and investors; and a picture of net position and the availability of assets for expenditure by the University.
Statements of Revenues, Expenses, and Changes in Net Position present the total revenues and expenses of the University for operating, nonoperating, and other undertakings during the fiscal years ended June 30, 2013 and 2012. Their purpose is to assess the University's operating and nonoperating activities.
Statements of Cash Flows present cash receipts and payments of the University during the fiscal years ended June 30, 2013 and 2012. Their purpose is to assess the University's ability to generate net cash flows and meet its obligations as they come due.
Notes to the Financial Statements present additional information to support the financial statements and are commonly referred to as “Notes.” Their purpose is to clarify and expand on the information in the financial statements. Notes are referenced in this discussion to indicate where details of the financial highlights may be found.
Required Supplementary Information (RSI) presents additional information that differs from the basic financial statements in that the auditor applies certain limited procedures in reviewing the information. In this report, RSI includes the funding status of other postemployment benefits and the Alternate Medicare Plan, as well as this management's discussion and analysis.
It is important to combine this financial analysis and discussion with relevant nonfinancial indicators to assess the overall state of the University. Examples of nonfinancial indicators include trend and quality of applicants, freshman class size, student retention, building condition, and campus safety. Information about nonfinancial indicators is not included in this analysis but may be obtained from the University's Office of Institutional Research (see www.cu.edu/ir). Additional information may be obtained at the University's Accountability Data Center (see www.cu.edu/accountability.
Increases in net position during a period of declining budgets are one indicator of concerted planning on the part of University management to address previous and anticipated future funding reductions. For each of the two past fiscal years, the University has managed to increase its net position. The University's net position increased by $217,859,000 for the year ended June 30, 2013.
Selected financial highlights for the fiscal year ended June 30, 2013 include:
|Total COF and Fee-for-service||$143,842||145,776||181,556||88,211||159,104||194,985|
|Total COF, Fee-for-service and SFSF||$143,842||145,776||192,466||209,099||209,099||194,985|
On February 17, 2009, the American Recovery and Reinvestment Act (ARRA) was signed into law. ARRA is a $787-billion economic package designed to stimulate the national economy out of a continued recession. Included in the stimulus package was $144 billion of federal funds allocated to state governments, via the SFSF, to mitigate the impacts of cuts made to their budgets resulting from the recession. The State of Colorado received $760 million from the SFSF over a three-year period of which $622 million was allocated for education stabilization. The change in SFSF received is the result of the timing of distributions of funding from the federal stimulus program. In accepting these funds, certain stipulations were placed on the use of the funds, including taking steps to mitigate tuition and fee increases for in-state students.
Figure 2 illustrates the University's summary of net position and demonstrates that the University has positioned itself for the current economic environment and related anticipated budget constraints through its fiscal decisions made at the beginning of the economic downturn several years ago. The mix of assets, liabilities, and net position has remained consistent, with the exception of deferred outflows of resources. The deferred outflows of resources of $39,407,000 in Fiscal Year 2013 and $31,445,000 in Fiscal Year 2012 represent the deferred loss on bond refundings which was previously netted against bonds, leases, and notes payable. The change in net capital asset composition is related to ongoing capital-related activity. Analysis of the University's capital assets and related debt is included in the section Capital Asset and Debt Management, whereas this section provides analysis of the University's noncapital assets and other liabilities.
|Noncurrent, noncapital assets||1,816,409||1,715,943||1,306,694|
|Net capital assets||2,713,849||2,610,597||2,534,573|
|Total Deferred Outflows||39,407||31,445||12,731|
|Total Assets and Deferred Outflows||5,206,119||4,860,766||4,466,265|
|Net investment in capital assets||1,579,724||1,473,009||1,441,393|
|Restricted for nonexpendable purposes||32,861||32,861||31,924|
|Restricted for expendable purposes||390,116||379,820||342,163|
|Unrestricted, as restated||1,019,861||919,013||830,179|
|Total Net Position, As Restated||3,022,562||2,804,703||2,645,659|
|Total Net Position and Liabilities||$5,206,119||4,860,766||4,466,265|
The University's investments were $2,044,486,000 and $1,837,958,000 at June 30, 2013 and 2012, respectively, representing an increase of $206,528,000. The University maximizes earnings through an internal pooling program and targeted rates of returns. The University has leveraged the investment portfolio and earning power while ensuring security and liquidity requirements are also met. The increase in investments in Fiscal Year 2013 is due primarily to an increase in net position of $217,859,000 (resulting in additional funds available for investment), an increase in unrealized gains of $66,609,000, in addition to normal fluctuations in balances such as changes in fair value and reallocation between funds held in cash versus those invested.
The University's investments increased $303,719,000, from $1,534,239,000 in Fiscal Year 2011 to $1,837,958,000 in Fiscal Year 2012. The increase is due primarily to $238,246,000 of unspent construction funds invested, and an increase in net position of $166,289,000.
The increases in net accounts and loans receivable from Fiscal Year 2012 to Fiscal Year 2013 of $7,919,000 and from Fiscal Year 2011 to Fiscal Year 2012 of $16,070,000 are due to increases in tuition and fee revenue increasing student accounts receivable, increases in private sponsors funding of grant spending, and increases in health services revenue increasing patient accounts receivable.
The University's non-debt-related liabilities are $778,453,000 and $695,863,000 at June 30, 2013, and 2012, respectively. These liabilities are comprised of amounts categorized in Figure 3.
|Other postemployment benefits||165,393||131,508||105,563|
|Alternate medicare plan||6,700||5,200||4,100|
|Early retirement incentive program||6,245||7,973||8,978|
|Construction contract retainage||6,036||4,367||11,391|
|Funds held for others||16,707||15,948||17,052|
|Total Non-debt-related Liabilities||$778,453||695,863||655,389|
The largest categories of non-debt-related liabilities are accrued expenses, compensated absences, other postemployment benefits (OPEB), and unearned revenue. Accrued expenses primarily represent salaries and benefits earned by University employees, primarily for June payroll, but not paid as of fiscal year end. This balance will vary depending upon the timing of payment of bi-weekly payrolls.
Compensated absences and OPEB estimate the amount payable to employees in the future for their vested rights under the University's various leave and retirement programs. This estimate is based on personnel policies that define the amount of vacation, sick leave, and other postemployment benefits to which each employee may be entitled (Note 1). Compensated absences typically increase year-over-year as employees accrue additional vacation days and salaries change.
The University is required to account and report on OPEB (Note 7). Such benefits include health insurance benefits for University retirees and their dependents. The accounting standard requires a liability to be recorded for the cumulative difference between the annual OPEB cost and the employer's contribution to fund the obligation. The University has chosen to fund this liability on a pay-as-you-go basis rather than fund the annual OPEB cost. The unfunded actuarial liability, as determined by the University's current actuary, is $406,782,000 as of July 1, 2012 and $343,144,000 as of July 1, 2010. The unfunded actuarial liability represents the excess of the actuarial accrued liability (the obligation for benefits earned) over the actuarial value of assets. As noted earlier, the University has elected not to fund this liability; therefore there are no assets held in trust to pay future benefits which have been earned by employees. In accordance with Generally Accepted Accounting Principles (GAAP) the unfunded actuarial liability amount is not currently reflected in the financial statements and is therefore not included in Figure 3. Although accounting standards do not prescribe the inclusion of the unfunded actuarial liability in the financial statements, the existence and amount of this balance should be considered in determining future resource demands on the University. As noted in Figure 3, the liability required to be reported in the financial statements totaled $165,393,000 in Fiscal Year 2013, an increase of $33,885,000, and the liability totaled $131,508,000 in Fiscal Year 2012, an increase of $25,945,000 from Fiscal Year 2011. This increase is primarily due to the annual required contribution of $49,553,000 and $40,717,000 (which is unfunded) offset by pay-as-you-go amounts of approximately $11,608,000 and $10,805,000 for Fiscal Year 2013, and Fiscal Year 2012 respectively. The remaining increase is detailed in Table 7.2 contained in Note 7 to the financial statements.
Unearned revenue represents amounts paid by students, auxiliary enterprise customers, grantors, and contractors for which the University has not met all of its requirements for revenue recognition (Note 8). These amounts will be recognized as revenue in future periods after all conditions have been satisfied. The unearned revenue balance fluctuates from year to year depending on factors such as the timing of the first day of classes and the rate of spending on grants and contracts in which payment has been received in advance.
The University's net position may have restrictions imposed by external parties, such as donors, or include items that, by their nature are invested in capital assets (property, plant, and equipment) and are therefore not available for expenditure or debt repayment. To help understand these restrictions, the University's net position is shown in four categories, as displayed in Figure 2.
A portion of net position is restricted for either expendable or nonexpendable purposes. This portion is then more specifically delineated by programmatic restrictions. The programmatic category of the restriction is shown on the statement of net position. A nonexpendable restriction requires the original principal to be set aside for perpetual investment (as an endowment). The majority of the endowment assets benefiting the University are held by the University of Colorado Foundation, which is a discretely presented component unit (Note 17) and not included in the above amounts. An expendable restriction allows the University to spend the full amount, but only for the purposes identified by the entity providing the money. Unrestricted net position, as defined by GAAP, is available for spending for any lawful purpose under the full discretion of management. However, the University has placed internal limitations on future use by designating unrestricted net position for certain purposes in keeping with management's plans to conserve resources in the current budgetary environment (Note 11).
Figure 4 illustrates the University's summary of revenues, expenses, and changes in net position. A key component of this summary is the differentiation of operating and nonoperating activities. Operating revenues are received for providing goods and services to the various customers and constituencies of the University. Operating expenses are paid to acquire or produce goods and services provided in return for operating revenues and to carry out the mission of the University. Nonoperating revenues/expenses include items determined to not fall in the operating category.
|Nonoperating revenues, net||264,642||168,475||279,878|
|Income Before Other Revenues||161,515||99,123||203,353|
|Increase in Net Position||217,859||166,289||260,996|
|Net Position, beginning of year, as restated||2,804,703||2,645,659||2,384,663|
|Cumulative effect of adoption of new accounting standard||-||(7,245)||-|
|Net Position, End of Year||$3,022,562||2,804,703||2,645,659|
Figure 5 provides an illustration of gross operating and nonoperating revenues by major sources excluding capital-related revenues. These sources include both State-appropriated and non-appropriated funds (Note 12). In Fiscal Year 2013, appropriated funds primarily include State stipends, fee-for-service contract revenues, and tobacco litigation settlement monies. The Fiscal Year 2013 and 2012 State budgets specifically excluded student tuition and fees from appropriated funds. In Fiscal Years 2011 and 2010, the student's share of tuition and certain academic fees were appropriated. In November 1992, Colorado voters passed Section 20, Article X of the Colorado Constitution, commonly known as the Taxpayer's Bill of Rights (TABOR). TABOR contains revenue, spending, tax, and debt limitations that apply to all the local governments and the State of Colorado, including the University. In Fiscal Year 2005, the Colorado State Legislature determined in Section 23-5-101.7 of the Colorado Revised Statutes that an institution of higher education may be designated as an “enterprise” for the purposes of TABOR so long as the institution's governing board retains authority to issue revenue bonds on its behalf and the institution receives less than 10 percent of its total annual revenue in grants as defined by TABOR. Further, so long as it is so designated as an enterprise, the institution shall not be subject to any provisions of TABOR. In July 2005, the University Board of Regents (the Regents) designated the University as a TABOR enterprise pursuant to the statute. During the Fiscal Years ended June 30, 2013 and 2012, the University believes it has met all requirements of TABOR enterprise status (Note 12). The amount of State grants received by the University was 1.09 percent and 1.11 percent during the Fiscal Years ended June 30, 2013 and 2012, respectively. The ability of the Regents to increase tuition rates is limited by the State, although the University's operations no longer impact the State's TABOR spending limits due to the University's enterprise status.
|Student tuition and fees, net||$771,692||745,005||694,477|
|Grants and contracts||776,414||795,085||791,995|
|Sales and services of educational departments||157,437||152,945||151,164|
|Auxiliary enterprises, net||211,151||191,548||180,892|
|Total Operating Revenues||2,628,120||2,512,192||2,420,456|
|Federal Pell Grant||44,754||44,146||46,280|
|Investment income, net||130,685||24,581||133,665|
|Royalty income, net||7,718||24,178||3,037|
|State fiscal stabilization funds||-||-||10,910|
|Other nonoperating, net||6,690||6,294||4,565|
|Total Nonoperating Revenues||305,458||216,693||303,675|
|Total Noncapital Revenues||$2,933,578||2,728,885||2,724,131|
The University experienced increases in all operating revenue sources in Fiscal Year 2013 except for state-funded fee-for-service contract revenue and federal grants and contracts. The increase in tuition and fee revenue for Fiscal Years 2013 and 2012 reflects a combination of changing enrollment and rate increases. In Fiscal Year 2013, approved tuition rates increased 5.0 percent at the University of Colorado Boulder, 4.9 percent at the University of Colorado Colorado Springs, and 1.0 percent at the University of Colorado Denver. In Fiscal Year 2012, the increases were 9.4 percent, 7.0 percent and 9.0 percent, respectively. At the University of Colorado Anschutz Medical Campus, the increase to approved tuition rates was 3.0 percent in Fiscal Year 2013, and ranged from 3.0 percent to 15.0 percent in Fiscal Year 2012. The COF provides stipends to qualified undergraduate students; the receiving students then use the stipends to pay a portion of their tuition. In Fiscal Years 2013 and 2012, the University applied $50,941,000 and $50,246,000, respectively, of COF stipends against student tuition bills (these amounts are included in tuition revenues). Fee-for-service revenue from the State decreased $2,629,000 between Fiscal Year 2013 and 2012, and also decreased $35,409,000 between Fiscal Year 2012 and 2011 due to State budget cuts.
Consistent with the University's goal to increase its focus and national role as a comprehensive research institution, the University's largest source of revenue continues to be grants and contracts revenue, which includes federal, state, and local governments, and private sources. Grants and contracts revenue from the federal government represents 82 percent and 83 percent of total grants and contract revenue for Fiscal Year 2013 and Fiscal Year 2012, respectively. These funds can only be used for the purpose given and have decreased in Fiscal Year 2013 due to a decrease in ARRA projects and a decrease of spending on Federal grants. In Fiscal Year 2012 grants and contracts revenue increased as a result of general overall growth in research funds received and funds received under ARRA.
These also provide necessary funding for the administrative functions and facilities that support the grants through the facilities and administrative reimbursement. In Fiscal Years 2013 and 2012, the University received $161,868,000 and $166,230,000, respectively, of such administrative and facility overhead cost reimbursements. The University pledges portions of this reimbursement revenue and other auxiliary revenues to satisfy its bond obligations, which are commonly referred to as pledged revenues, thus creating a reliance on continued federal research funding.
The increase in auxiliary enterprises revenues in Fiscal Year 2013 is due to PAC-12 distributions received of $13,500,000 and the new operation of the Health and Wellness facility on the CU Anschutz Medical Campus. In Fiscal Year 2012, the University also experienced growth in its auxiliary operations serving students, such as housing and bookstores, consistent with the increase in the number of students, and increased dining and on-campus housing units.
The University received $14,172,000 and $14,365,000 in Fiscal Year 2013 and Fiscal Year 2012, respectively, in State appropriations funded by State of Colorado tobacco litigation settlement monies.
Investment income is subject to inherent variability due to the requirement to record the majority of investments at fair value. Investment income decreased from $133,665,000 in Fiscal Year 2011 to $24,581,000 in Fiscal Year 2012 then increased to $130,685,000 in Fiscal Year 2013 mainly due to changes in the fair value of investments. In Fiscal Year 2013, the University's unrealized gains on investments (the difference between the investment's fair value and cost basis) increased $66,609,000. In Fiscal Year 2012, the University's unrealized gains on investments decreased $18,268,000.
Royalty income decreased $16,460,000 between Fiscal Year 2013 and Fiscal Year 2012 due to the sale of certain royalty rights to a third party that only occurred in Fiscal Year 2012.
In addition to operating and nonoperating revenues, the University had capital revenues in the amounts depicted in Figure 6. As a result of construction and renovation of certain buildings, the University recognized capital contributions from the State of $314,000 and $1,383,000 in Fiscal Year 2013 and 2012, respectively. These capital contributions are related to certificates of participation issued by the State to finance construction and renovation.
|Capital contributions from the State||$314||1,383||4,130|
|Capital student fee, net||8,517||9,879||10,144|
|Capital grants and gifts||45,244||54,160||40,901|
|Gain (loss) on disposal of capital assets||6,490||(983)||18,471|
|Total Capital Revenues||$62,834||66,116||76,045|
The University also received additional appropriations from the State of $2,269,000 in Fiscal Year 2013 compared to $1,677,000 in Fiscal Year 2012. These monies are used for various controlled maintenance and other capital construction activity and fluctuate year to year based on the State budget.
Capital grants and gifts decreased $8,916,000 in Fiscal Year 2013 due to the completion of four large construction projects: the JILA X-Wing addition, the BioFrontiers building, the MRI consortium, and the Health and Wellness Center. These construction projects had both grant and gift funding sources. Capital grants and gifts increased $13,259,000 in Fiscal Year 2012 due to the Health and Wellness Center at the CU Anschutz Medical Campus, in addition to continued ARRA funding for building construction at CU-Boulder.
The gain on disposal of capital assets in Fiscal Year 2013 is due to the sale of the partial land sale of 6.74 acres of the 28.55 acre site at the former 9th Avenue campus.The programmatic uses of resources are displayed in Figure 7 and demonstrate that the focus is basically unchanged over the past three fiscal years. Total educational and general programs overall have grown by 2.5 percent and 3 percent in Fiscal Year 2013 and Fiscal Year 2012, respectively, due to increases in instruction. The increase in academic, institutional, and plant support is related to the increases in instruction. Cost management measures in place for the past several fiscal years were continued in Fiscal Year 2013 as restrictions on funding have impacted the University's operations. In implementing these measures the focus is more on targeted decreases in support and other services in planning for potential restrictions in funding in the next few years to minimize the impact on instruction. Public service expense increased in Fiscal Year 2013 due to $3,700,000 increase in research projects sponsored by the Colorado Department of Public Health.
|Academic, institutional, and plant support||391,423||376,836||349,445|
|Student aid and other services||110,025||104,446||98,268|
|Total Education and General||1,885,681||1,839,248||1,788,479|
|Total Operating Expenses||$2,731,247||2,581,544||2,496,981|
The amounts shown for student aid do not reflect the actual resources dedicated to student aid. The majority of the University's student aid resources are netted against tuition and fee revenue as a scholarship allowance (Note 13). The University's scholarship allowance was $146,201,000 and $140,418,000 in Fiscal Year 2013 and Fiscal Year 2012, respectively.
The increase in auxiliary enterprises in Fiscal Year 2013 is due to a one-time expense in Athletics related to severance packages, increased expenses to the housing and dining services due to greater utility cost and upgrades to IT services, and expenses related to the new operation of the Health and Wellness facility. The decrease in auxiliary enterprises expenses from Fiscal Year 2011 to Fiscal Year 2012 is due to the nonrecurring nature of expenses associated with the change from the Big 12 Conference to the PAC-12 Conference and other one-time expenses that took place during Fiscal Year 2011.
Increases in expenses related to health services, which are primarily related to UPI, are consistent with the associated increases in health services revenue discussed earlier in this section.
The University had $4,407,275,000 and $4,216,701,000 of plant, property, and equipment at June 30, 2013 and 2012, respectively, offset by accumulated depreciation of $1,693,426,000 and $1,606,104,000, respectively. The major categories of plant, property, and equipment at June 30, 2013 and 2012 are displayed in Figure 8. Related depreciation charges of $170,478,000 and $153,680,000 were recognized in the Fiscal Years 2013 and 2012, respectively. Detailed financial activity related to the changes in capital assets is presented in Note 5. Figure 9 details the University's current construction commitments.
|Construction in progress||251,891||114,160||301,193|
|Buildings and improvements||3,234,296||3,177,665||2,824,189|
|Library and other collections||347,162||329,765||315,684|
|Total Capital Assets (gross)||$4,407,275||4,216,701||4,003,658|
|Campus/Project Description||Financing Sources||Value*|
|Housing Baker Hall Renovation||Bond proceeds||41,300|
|Housing Kittredge West Renovation||Bond proceeds||22,800|
|Housing Stearns Fan Coil Units||Campus cash||5,900|
|Campus Utility System||Bond proceeds and campus cash resources||91,100|
|Geosciences Building (SEEC)||Bond proceeds and campus cash resources||106,100|
|Housing Kittredge Central Projects||Bond proceeds and campus cash resources||37,250|
|Recreation Facilities Improvements||Bond proceeds||63,500|
|Quadrangle Residential Hall Redevelopment||Bond proceeds and campus cash resources||62,400|
|Ekeley Sciences Middle Wing Renovation||Campus cash||14,362|
|Williams Village Dining and Community Center||Campus cash||37,000|
|Housing Bathroom Upgrades||Campus cash||6,152|
|Jennie Smoly Caruthers Biotech Bldg (5th Wing)||Governmental grants and contracts, bond proceeds, and campus cash resources||194,900|
|AHEC Academic Building 1, new building||Bond proceeds and campus cash resources||62,552|
|AHEC Academic Building 1 Backfill||Campus cash resources||5,324|
|Lane Medical Center||Bond proceeds, private gifts and campus resources||18,500|
|Summit Village Expansion||Bond proceeds||17,500|
|Stanton Road Parking Garage||Bond proceeds||23,000|
|Academic Office Building||Bond proceeds||12,000|
|* Value represents budgeted costs for project in thousands|
During Fiscal Year 2013, the University issued $195,870,000 in revenue bonds. Of this amount, $100,165,000 was used to refund previously issued debt and $95,705,000 was issued to fund the following University of Colorado Improvement Projects: Baker Hall at CU-Boulder; parking facility, Recreation Center, and Academic Office Building at UCCS; Central Utility Plant chiller at CU Anschutz Medical Campus; and Academic Building I and backfill at CU Denver. These bonds are special limited obligations of the University, payable solely from net revenues, as defined.
At June 30, 2013 and 2012, the University had debt (or similar long-term obligations) of $1,405,104,000 and $1,360,200,000, respectively, in the categories illustrated in Figure 10. More detailed information about the University's debt is included in Note 9.
|Total Long-term Debt||$1,405,104||1,360,200||1,165,217|
The Regents have adopted a debt management policy that includes limitations on the use of external debt. The University Treasurer will report to the Regents, prior to the issuance of new debt, the effect that the new debt will have on the University's debt capacity ratio to ensure the 7-percent limit currently established by the Regents is not exceeded. The ratio is calculated as maximum annual debt service as a percentage of the University's unrestricted current fund expenditures plus mandatory transfers. State statute sets the maximum for this ratio at 10 percent in C.R.S. 23-5-129.5(2)(d). A component of this policy is debt capacity, which is the calculated ratio of the University's debt service requirement as compared to certain unrestricted revenues. The University maintained its debt capacity limits. The University minimizes financing costs by monitoring current market conditions and by maintaining a bond rating of AA-, Aa2, and AA+ (Standard & Poor's, Moody's, and Fitch, respectively).
The Fiscal Year 2014 budget approved by the State Legislature includes an additional $30,000,000 in funding for higher education. Of this amount, the University has been appropriated approximately $9,000,000. Additionally, State funding for capital projects at the University is set to increase approximately $30,000,000 (a portion of which is dedicated to the Auraria Campus, which includes the CU Denver, Metropolitan State University of Denver, and Community College of Denver). The budget for the University for Fiscal Year 2014, as approved by the Board of Regents, increased approximately $68,000,000. Very early indicators for State funding of higher education for Fiscal Year 2015 show continued increases.
Based on long-term forecasts, continued increases in state funding are unlikely. State revenues are not increasing at the same rate as statewide Medicaid caseload or K-12 enrollment growth. State support for these mandated expenses will require a larger share of available resources and higher education remains vulnerable as it continues to be one of the only flexible components of the state budget that is not protected via state constitutional or federal requirements. Additionally, competition for federal research funding is intensifying as federal stimulus draws to a close and sequestration limits the amount of federal funding available. Continued pressure on research funding is anticipated pending resolution of the debate over the federal deficit.
In response to the pressures noted above, the University has taken strategic steps to ensure the continuing quality of education and research. Average tuition increases, ranging from 0.1% at CU Denver to five percent at CU-Boulder, were implemented for the upcoming academic year. Furthermore, the University's high profile as one of the top recipients of federal funding in the nation will provide a competitive edge in this area. Changes to the structure of fundraising at the University are designed to double the amount of private support received, in part supplanting anticipated decreases in State aid. Due to historically low interest rates, the University has refinanced a significant portion of its long-term debt. The last three debt refundings resulted in a decrease in debt service payments of $17,216,000. Through these efforts, and an ongoing focus on efficiency entity-wide, the University is continuing its stewardship of financial resources and is proactively planning for an uncertain future.